The breakout occurred. A 20% rally could easily occur this time.

Market Outlook

We are ~99% invested at this point. The turnaround for the economy is now real but fragile. Only the private sector can create jobs that create value and wealth that can be used to pay taxes and make government sustainable. Government jobs require taxes and create dependency, political hacks, make work jobs for unemployable hunter-gatherers, and union jobs with freeloading featherbeders, corruption and strikes. In socialist France even the doctors go on strike. In communist East Germany the people had a saying, "Government pretends to pay the people and the people pretend to work." Government printing money to pay people to do nothing does not work and never has worked long before.

In Africa under socialist Sharia law the saying is "Kill the farmers, kill the Christians, and rape the unfaithful women and take what they have and have a good life, and 90 virgins in death." All forms of socialism and communism are rule by the majority for the mentally ill governing elite. When the socialist majority thinks they have a mandate their first task is always to criminalize and crush their opposition. Criticism of the government becomes a crime and the children are asked in school to report their parent's crimes against socialism. This is the direction America is heading with the current democrat-socialist congress and their socialized medicine and nationalization of auto and banking sectors. When America ceases to be the world's anchor of free enterprise and liberty the whole world will be adrift again as when American withdrew to isolationism before the two world wars. For America to avoid a depression and a world nuclear war the socialist American congress needs to be thrown out of office in 2010. Nationalist socialism, religious socialism, and communist socialism are all forms of sick obsessed elitism where the elitists think their beliefs are superior and they should make all the decisions and should plan our lives for us. Whether it was an inquisition, Hitler's Nationalist Socialism, Stalin's Gulag, Mao's one bullet to the head, or the Mullahs slow sawing off of screaming heads… they all eventually accrued majority power and created tyrannies that slaughtered everyone who disagreed with their government policies.

This week we have important reports that we believe will support the conclusion that a turn around actually began just this past month. Unfortunately socialist cause depressions that always have an intermediate turn around before the government "stimulation effort" fails and the "Great Depression" begins in a fury. We need a congress that supports free enterprise elected in 2010 or else a socialist depression can go on for 10 to 50 years before the government is thrown out or destroyed by war.

The peak foreclosure rate is now a thing of the past. The third quarter foreclosure rate was up 23% from a year earlier and at the peak rate for this recession. The peak occurred in August, and September foreclosures began to drop. The foreclosure rate dropped 4% in September from the record level in August and September was only the third highest level of this recession. The real estate market has begun to turn around but as businesses continue to cut costs to remain solvent they continue to lay off workers. Too many home mortgage owners continue to lose their jobs.

However cost cutting is allowing banks and many businesses to turn profits again and soon hiring can begin as business expands and creates wealth.

Thursday, Oct. 15am:
--- Unemployment Claims
---Consumer Price Index
---NY State Mfg. Index
---Philly Fed Index

Friday, Oct. 16 am:
---Industrial Production
Capacity Utilization - Sep
---Consumer Sentiment


Market forces October 14

At Dow 10000 we are back to where we were in October of 2008, and in october 2004 and in April of 1999 before that. So in essence we have 2009 values priced as they were in 1999. Therefore the market's hidden value in our economy is enormous right now. Even if we had not added value in the last ten years the price of the market should have gone up due to inflation alone. And of course were have actually added tremendouse value since 1999.

We are optimistic and virtually fully invested again. The market has to rise 40% just to get to its 2007 levels without the inflation of Obama's printing presses. There is quite a bit of upward potential left.

Asian markets were up last night; China up 0.3%, Hong Kong up 0.5%, India down -0.2%, Japan up 1.8%, and Seoul up 0.6%.

European markets are down in a range from -0.2% to -0.5% this morning about half way through their day.

US pre-market are lower today by about -0.4% at 8:30 AM EST